Workers to be classified as part-time employees

People who work sporting events will be required to pay taxes on nominal fees

December 10, 2012

LISBON - School boards in Columbiana County and around Ohio will soon be requiring the people who work their sporting events be classified as part-time district employees.

This means those people will begin paying taxes on the nominal fees they receive, and athletic programs must come up with extra money to cover the mandatory employer contributions into the employee benefits package.

The East Palestine school board is believed to be the first to classify its athletic event workers as district employees, after having voted to do so at last week's meeting, and the Lisbon school district is expected to act accordingly when it meets this week.

All thanks to the Internal Revenue Services and U.S. Department of Labor.

Lisbon School Treasurer Cindy Altomare said the Ohio High School Athletic Association (OHSAA) recommended athletic event workers be considered public employees instead of independent contractors.

OHSAA advised school districts to comply starting in 2013.

"It is my understanding the IRS is looking at this as missed tax opportunities," she said.

OHSAA Chief Financial Officer Jim Jordan said this is part of an IRS review of how all independent contractors are classified to determine whether they should instead be designated as employees for the purposes of taxation.

Jordan said they have recommended school districts review the IRS test to reach their own conclusions, but OHSAA is of the opinion only referees/umpires/

officials and security are the only truly independent contractors at sporting events.

Until now, school districts were only required to issue IRS 1099 forms to those independent contractors whose annual compensation exceeded $600, which rarely occurred since most are only paid $20 to $25 per event.

"It's basically a change in interpretation as to whether these people should get a 1099 or run through payroll," Altomare said.

The new requirement affects those who sell and take tickets, announcers, scorers, football chain movers and other event staff. Security, referees and other officials will remain exempt.

There will be a cost to school districts since public employers must make matching contributions into a worker's benefits package, such as retirement, workers compensation, Medicare, etc. Altomare said this will total about 16 percent for Lisbon.

Like most schools, the money to pay event workers comes from the athletic programs itself and not directly from district funds. Altomare said Lisbon's athletic programs spends about $6,000 a year on event workers, so the new requirement will likely increase the cost by about $950.

"I don't know that it's going to be high ... It's just really a hassle," she said, adding the financial impact would be harder on those districts whose athletic programs lack a surplus.

Event workers will now have the normal federal and state taxes automatically withdrawn from their checks, and Altomare believes this may affect whether some people continue working these events.

"What we're all facing is because these people making so little, when we run it through payroll it will be even less," she said. "The biggest impact is the people may not really want to do this anymore."